Kevin Ryan, the ‘Godfather’ of NYC tech, on serial entrepreneurship, Gilt’s IPO and a possible run for mayor

Few tech entrepreneurs in New York have created a billion-dollar company. None, other than Kevin Ryan, have created multiple billion-dollar companies. Ryan co-founded DoubleClick, which went public and then sold to Google GOOG for $3.1 billion; MongoDB, which last Fall raised money at a $1.2 billion valuation; and Gilt Groupe, which was valued at $1 billion in 2011 and is expected to go public any day now. He’s also created Business Insider, which raised money this year at a $100 million valuation.

He can take a good deal of credit for the growth of New York’s burgeoning tech scene, which in the last decade has gone from just a few notable companies to surpassing Boston as the country’s second-largest tech center in terms of investment dollars. Not only do his companies employ thousands of New Yorkers, but they’ve started an ecosystem of second-generation tech companies. Some companies founded by ex-DoubleClick employees include Narrative Science, RollUp Media, FindtheBest, GroupCommerce, Freewheel, Catchpoint, and Minivid.io. There is an entire blog dedicated to the doings of DoubleClick alumni. Likewise, Ex-Gilt employees have created a mafia of their own, founding startups like Vaunte, GroupMe, Moda Operandi, Placemeter, Timehop, and Vine.

Ryan is not stopping there. Last Fall, he launched his next startup, a mobile wedding registry company called Zola. Currently Ryan splits his days across eight different responsibilities, including his four companies and the boards of Yale University and Human Rights Watch. He also works on the “general policy and politics of NYC,” liaising between the city government and business and tech communities. That position – a lynchpin between the three areas – is what made him a potential mayoral candidate last time around. The next election cycle might be more amenable for Ryan to run, he says, while denying such ambitions.

For now, he’s dedicating around 10% of his time to planning ideas for new companies, possibly in fin-tech or healthcare. What’s one more? The first few have worked out pretty well.

In an interview with Fortune (lightly edited for length and clarity), Ryan discussed his entrepreneurial process, his failed startups, the future of his most visible company, Gilt Groupe, his take on NYC Mayor Bill de Blasio and a possible mayoral run of his own, and why he never enters the same industry twice.

Fortune: Would you say you’ve created a career around being the idea guy? That seems to be a lot of peoples’ dream in the tech world.

Kevin Ryan: Yes and no. In the last 15 years, probably nine of them I was personally CEO, managing more than 1000 people. There are few other companies in NYC with more than 1000 people. I’m actually the operator who’s managed the most people in the last 15 years from a person-to-years point of view. There are people who I consider real idea people, who don’t manage people. They say, “I have an idea, I get it off the ground, and I hand it off.” That’s not me. I manage.

Most of the companies you’re known for are big wins. Any ideas that failed?

Not so much companies, but as part of DoubleClick, or as part of Gilt, we’ve launched businesses that didn’t work. Park & Bond [a part of Gilt Group] was something we launched that didn’t work. At Gilt, we made acquisitions that didn’t work. There are all kinds of things we did that didn’t work.

We launched a company called ShopWiki, which worked a little bit. Everyone made a little bit of money. We sold it for $17 million. Let’s call it a bunt single. It was okay. Panther Express was a company Dwight [Merriman, co-founder of DoubleClick] and I started which was definitely a mostly strikeout. It got to 40 people, $50 million in revenue. The dynamics in the industry shifted on bandwidth prices, so we said, “Let’s sell it,” and we lost 50% of the money that anyone put in. Not a total write-off but definitely not a good outcome.

Along the way, you hire people that don’t work. I have four CEOs in place. I am working with them and talk to them all every single week.

You’re far more involved with your companies than other investors are –

— I’m not an investor.

Is that because you consider yourself a co-founder?

I don’t consider myself a co-founder, I am the founder. It’s very different. That’s what people don’t realize. I don’t invest in other companies. The Gilt idea was 100% my idea. There was no one else involved. Then I went out and started hiring people. The same is true for Business Insider. It was my idea, I was out interviewing six different candidates for Business Insider and Henry [Blodget] was one of them.

That’s why I don’t consider myself a founder, I am a founder. So I feel very differently. I consider myself to be the only real steward of the company.

Let’s say Gilt could go public at some point. Five years from now, none of my board members will be on the board, but I will. Because they’re investors. They’re going to distribute their stock and they’ll be done. The senior team, many, hopefully a lot of them, will be here. But in five years people turn over for whatever reason. The only person I know who will be here five years from now will be me.

So Gilt was your idea. With flash sales going out of vogue, do you still believe it was a good one?

I don’t accept the general interpretation there. What Gilt does today is exactly what it did day one. Literally the first week, we had a sale of Zac Posen at 50% off. Today we sell basically the same thing. Along the way, we’ve had 15% [of inventory] sell at full price which has worked very well in travel, and we do it in a few other places. We tried it in Park & Bond and with food and it didn’t really work. So we haven’t actually shifted.

What about the knock that, after the recession and recovery happened, the high end luxury brands didn’t want to discount on Gilt anymore?

That is absolutely, provably completely untrue. In the first two years of Gilt, did we ever have Armani? Did we ever have, name 20 luxury brands and the answer is “no,” we did not have them. And today we have them.

The second thing is people also forget that in the first nine months of Gilt, it was a boom. We didn’t start in the recession. We started in 2007 and it was so hot, it was growing — we did $25 million in our first year. It was growing unbelievably well.

When I was raising money right at the end of the boom, and the recession was just starting, the number one question was, “Obviously Gilt works, but we’re going into a recession, we don’t think it’s going to work. People don’t buy luxury in a recession.”

A year after that, we were raising money again. People said, “Kevin, obviously it works in a recession, but can it work in a boom?” You can’t have it both ways. Revenues in 5 years of Gilt never have gone down. They’ve grown the entire time.

So why the delay?

Delay of what?

The IPO has been talked about for years.

We’ve never said that. You have said that.

That’s because investors who are close to the company have for years told me, “Okay now Gilt is ready, they’re almost going to be profitable, it’s happening.” Then nothing happens, and they say it again six months later.

Bankers talk to everyone all the time. We’d never filed to go public. We never went down the process of going public. No one has come to you a year ago and said “They’re picking bankers right now.” What you always heard is very high level, every press conversation we’ve had is like, “When are you going public? We’re always like, “I don’t know, at some point. At some point we’ll go public.” [Note: In February, Bloomberg reported that Gilt had chosen Goldman Sachs to lead its IPO.]

The window might be closed now.

Don’t forget, I have a different perspective on this. So, it doesn’t matter whether we go public three years ago or a year ago. If you said five years from now, why does that matter?

IRR for investors?

I don’t care about that.

I don’t think they would like to hear you say that!

I don’t care about that and I have super voting shares. So, that’s not my goal at all.

So hypothetically, when Gilt goes public, what will the story be that you want to tell Wall Street about the company? I’ve noticed the company has been playing up its tech innovations, which makes sense because investors value tech companies more richly than they do commerce or retail companies. Is that intentional?

Gilt is an online retailer that uses technology extremely well. By my definition, it’s not a tech company. My definition of a true tech company is one that sells technology. If your product is technology, you’re a tech company. Mastercard MA for me is not a tech company even though they have thousands of engineers. JP Morgan JPM is not a tech company, even though they have tens of thousands of engineers. Mongo is a tech company. The product we sell is technology. So, Gilt uses technology and Amazon AMZN uses technology extremely well, it’s a competitive advantage. Which, I don’t know anyone in e-commerce that uses it better than we do.

But it’s not a positioning thing. When you’re a more mature company, investors don’t care about any of those things. They care about revenues, and profits, positioning, size of market, things like that.

How’s Gilt doing on that?

Great, it just keeps growing. What you’ll see is that for four years, the bottom line gets better and better. It starts negative and gets to positive, exactly what you want to see, and the revenues just keep going.

There’s been a pattern, at least in New York’s tech scene, where a hot company’s narrative changes. People start losing interest, or they write it off. It happened with Gilt, with Foursquare, with Tumblr, and many of the big New York tech companies. Suddenly the media turns on them.

The media has to write about something but that’s an issue the company doesn’t get to control. Companies that don’t get a lot of press don’t go through that. Etsy, people write very little about Etsy relative to how important and how big it is. They’re doing great and they’ve always done great.

Some just never get covered. Indeed sold for $1.4 billion. I would say 50% of the journalists I know have never even heard of the company. Priceline PCLN is much bigger than Twitter TWTR, much more valuable than Twitter. Kayak KYAK, same thing. ZocDoc, Mongo… Mongo is the most valuable company in New York City and you read very little about it. How many people know that Mongo is the most valuable private internet company here? Most people don’t know it.

So did you think that New York Times story about the disappointments of the New York tech scene was bullshit?

Yeah. There’s nothing that fundamentally has changed at all. Five years ago, there was one company in the entire New York area, private company, worth $500 million. It was Kayak. Eighteen months ago, we did a piece looking at New York City and we had 11 companies that had done private rounds at more than $500 million. That’s a big difference. I don’t know what that number is today.

On that list of eleven companies, since then Kayak, Tumblr and Indeed all sold for more than $1 billion. Mongo did a round at more than $1 billion. Four of them are clearly worth more than that. Fab is going to go to zero and Foursquare, I don’t know how much they’ll be worth, but they may not be worth $500 million. And you’ve got bunch still doing fine, ZocDoc, things like that. [Note: Fortunereported last week that ZocDoc is raising a new round of funding at a valuation of $1.6 billion.]

If you look at a five-year trend, it’s unbelievably good. If you look at a five-year trend anywhere else, it’s not as good. San Francisco had, at the time, 10 companies and now they have 20. Good, everything is growing, the whole sector is growing. No one is growing as fast as New York. And then underlying that, there are dozens and dozens of companies that are doing well, the Business Insiders that may be worth $100 million or $200 million, and BuzzFeed, things like that. So, it’s all good. I don’t see anything bad happening at all.

It’s not San Francisco. You can’t be there in [only] ten years. When DoubleClick set up shop in New York, the number question was, “Why aren’t you in Boston?” Every time I mention that, people laugh. “Boston, what are you talking about? No one asks you that.” Every journalist asked me that. Because Boston was the center of high tech on the East coast, you should be there. You can’t be successful anywhere else. Already people have forgotten that now, if you go to Boston, it would make you laugh, because Boston is nothing. That shows you the context I have over time. So it’s going incredible.

Mayor Bill De Blasio at City Hall.

Are you a supporter of Mayor de Blasio? What’s your assessment of how he’s done so far liaising with the New York tech community?

I was reasonably involved. I hosted 60 Internet CEOs to meet him. And I did a smaller event at my house for 25 people. So I had known him for years. I keep in touch with all the Democratic politicians, so I know all of them.

When he won the primary, I went out to the tech community, and said, “Look he’s going to be the mayor. Your thoughts on that, in a way, are irrelevant. So unless you’re planning on moving somewhere else, it’s important that we work with him and important that we do a great job in helping him to be successful.” That’s how I approach all politicians in place.

Pragmatic.

Yeah. I feel he’s doing a lot of good things, having said that. We need to work with whoever the mayor is. In your first five months, when you’re putting your team together, no one can accomplish much at all.

He’s focusing on bandwidth which is very important and Bloomberg did not focus on. He’s trying to focus on creating jobs in all the boroughs, and hopefully that happens.

Would you ever consider running for mayor? There have been rumors about that.

I’m certainly definitively not running in the next election and I am probably never running.

Why?

I think it’s a great job. I think it’s the best job in politics, much better than senator, or those things, because you actually are CEO. I’m a CEO, so I like to run things. Managing the city is a really, really interesting thing.

It’s much more likely over time I continue what I’m doing now, which is help out in various ways, on boards and advising. Maybe at some point, if there was the right Deputy Mayor position.

A bunch of people approached me when they were looking for a business candidate. The logic on their side was, they wanted a business candidate, but it couldn’t come from Wall Street, brand-wise. Tech is the fastest growing industry and also a theme for everything. Twenty-first century. And they wanted someone who was old enough that could be mayor but still plugged in and doing stuff, so current.

That makes a pretty small Venn diagram of candidates.

It’s very small. So really they were like, “We don’t have anyone else. It’s just you by process of elimination. We wish we had eight candidates and we got no one.” (Laughs.)

The reasons I didn’t do it are:

1. My kids are at home for four more years, so I structure my life so I spend a lot of time with them. Four years from now, I have a lot more flexibility. All of these jobs are not family-friendly jobs.

2. My companies are going great and it’s really interesting and I really enjoy it, so you have to give that up. Two of them in particular over the next four years might end up going public or getting sold, so I’d like to see that through.

3. There was no chance a businessperson was going to win. Zero. Polling data said, “Do you think Michael Bloomberg is doing a good job?” and roughly 44% said “yes” and 42% “no.” Which is not bad after 12 years. Then they said, “Do you think the next mayor should do more of the same, or something very, very different?” And they said “something different.” Which is very unusual – usually they go together. If the mayor is doing well, they think, “This is good, we want more of this.”

Everyone liked him, but they were sick of him.

They were sick of him. So anyway, I am not running for mayor. I am very interested in public policy and I like playing a role in trying to help out.

Every company you’ve started since DoubleClick has been in a totally different field. Are you interested in ad-tech anymore?

No. I haven’t had a one hour meeting on ad-tech since 2005. I don’t do it. My father worked for chocolate factory to help him get through college. He has never eaten chocolate since because he can’t stand the smell of it.

It’s true that arguably, [co-founder Dwight Merriman and I] were the most significant people in ad-tech in the world. It’s rare that you get to that tiny place in the world where you are actually the guy. Criteo — I was in the room with Dwight in 2000 when we created behavioral targeting. That was 100% one meeting we came up with it, decided to do it, it’s now worth $3 billion, just that product.

So why walk away?

Because I’m totally bored with it. It’s a good sector. Ad-tech is a perfectly good sector. It’ll keep growing, that’s fine. I want to find things that I think are interesting. Most things I find interesting are new. I haven’t done them before.

So what is interesting?

Fin-tech, I’m looking at that. Intellectually, I’d love to do something in fin-tech or healthcare, which I don’t know much about. They’re big areas that interest me, but I don’t have the right idea that I’m passionate about yet.

Fin-tech is the Bitcoin, p2p lending, banker area. It’s the last trillion-dollar area that has hardly been disrupted by technology. That’s where there’s an opportunity. Both are industries that you have to know a lot about them to get into it. I never know anything about these industries.

You knew nothing about fashion starting Gilt?

I was in a brand meeting and they said, “Don’t you love what’s happening at Bergdorf’s on that 3rd floor?” And everyone’s like, “Yes, love it, love it.” And I was sitting there going, “I’ve never been to Bergdorf’s. I’ve been here 15 years and never gone.” The next day I went.

That goes against conventional wisdom that says you have to know the industry you’re disrupting. You shouldn’t be this swashbuckling 19-year-old drop-out looking to disrupt. When you give people advice, what do you tell them?

A lot of the great companies come out of people not knowing the industry at all. Most companies, it’s just a guy saying, “I see a pain point and I think I can solve it.” Some come out. In ’96, no one had any background in anything because nothing existed.

I think its better for most first time entrepreneurs (to know the industry), because it’s their first time. But most businesses are not that complicated. And also, you don’t do everything yourself. When I started Gilt, I knew how to run companies and how to manage people. Which is the key skill. I am not a distribution expert and a making dresses expert and a personalization expert and a merchandize planning expert.

What is most interesting is not a single one of the flash sales companies was started by traditional retailers. It was never somebody from Saks, never.

The New York-based company previously raised $97.9 million in venture funding. The prior round, a Series C worth $75 million led by Goldman Sachs and DST Global, valued the company at $700 million. DST Global, the fund run by Russian entrepreneur Yuri Milner, appears to be participating the latest round as well.

Founded in 2007, ZocDoc has grown to 550 employees, offering its services in 2000 cities with plans to go nationwide by the end of the year. The company attracted the attention of traditional healthcare companies, including Aetna, which reportedly offered to acquire the company for $300 million in 2013.

The company declined to comment.

Earlier this year, CEO Cyrus Massoumi tamped down IPO rumors by noting that ZocDoc was in no hurry to go public. ZocDoc has five million patients using its system to book doctors’ appointments. It has never revealed how many doctors pay the company a monthly fee for its listing services, because it does not want to reveal how much revenue it earns. In February, ZocDoc moved its CFO of almost six years and fifth employee, Netta Samroengraja, to the role of Chief People Officer, bringing in Joseph Holland, previously CFO WeddingWire, for the role. Massoumi told Fortune at the time that the move was Samroengraja’s decision, and came two years in the making.

This month ZocDoc unveiled a new subscription service for employers called ZocDoc for Business, which offers more personalized search results and services.

Online retailers are selling more than just stuff, they’re selling eyeballs and audiences.

E-commerce businesses live and die by their customer acquisition costs — the amount of money they spent to bring in a sale. The big difference between that and physical stores is that, once someone enters a physical store, they’re far more likely to buy something. After all, the customer walked in, voluntarily making themselves into a captive audience.

Online though? A cheaper, better, shinier option is just one click away. E-commerce sites pour tons of money and effort into attracting visitors, only to watch them toggle over to another tab without buying anything.

Online conversion rates are a dismal 3% at best, according to Jonathan Opdyke, CEO of commerce advertising startup HookLogic. “Most people who visit these sites are not buying anything, they’re doing research, bouncing between sites,” he says.

That doesn’t mean retailers’ hard-earned audiences can’t be monetized. Increasingly, e-commerce players are seeking ways to monetize their audience the same way online media businesses do: through advertising.

Three years ago, selling ads on an e-commerce site was a cautious experiment. Retailers worried ads would simply send the shopper elsewhere, rather than converting them into a customer. Now, most sophisticated e-commerce operations – from Wal-Mart WMT and Target TGT to Sears SHLD, Sports Authority, and Toys R Us, have a media sales and audience monetization team, Opdyke says. Eight out of ten US retailers now use display advertising, featured products and sponsored links to advertise the wares on their sites, according to a recent study by OC&C Strategy Consultants.

One way it works: Retailers sell ad placements to the brands they carry in their online stores. It’s similar to the way brands pay for eye-level product placement on supermarket shelves. HookLogic, based in New York, has raised $23.5 million in venture funding for its ad product, which shows sponsored search results within retail sites. The company works with all of the aforementioned retailers to sell placements for clients like Reckitt Benckiser. So, a search on Walmart.com for cleaning products might list Lysol as the top result, with a note that the result is sponsored, similar to paid search ads on Google.

Meawhile Bazaarvoice, a commerce software company, got into this business when it acquired Longboard Media, an on-site e-commerce advertising network for $43 million in 2012. Triad Retail Media, which works with Wal-Mart, eBay, Dollar General and CVS, claims it is the #1 “retailer monetization agency” in the world, by helping retailers integrate brand advertising into their sites.

OwnerIQ sells brand ads to a retailer’s audience after they leave a retailer’s site. This way, “Target can make money even if I don’t buy anything,” OwnerIQ CEO Jay Habegger says. This way brands can hit shoppers with display ads across the Web after they’ve left a commerce site.With north of 300 data partners, OwnerIQ plans to grow revenue by 70% this year. The company today reveals it has raised $6 million in additional funding from its existing investors, bringing the total funds raised to $39 million. The funding is a part of the company’s most recent $5 million in new venture funding, announced earlier this year. Habegger says the company will use the existing funding to strengthen the company’s technology and staff.

Audience monetization is incremental revenue for e-commerce players: A retailer selling $100 million worth of products might make $10 million in profit. They’re already paying to attract the audience, so if they sell $10 million worth of media, they make $10 million in profit. HookLogic customers can earn anywhere between $100,000 for a smaller site to tens of millions in new revenue per year for the bigger sites, Opdyke says. Now, online window-shoppers can browse away — stores have figured out a way to make money on them, regardless of whether they buy anything.

Tony Fadell: In his own words

Tony Fadell, a former Apple AAPL executive who went on to co-found Nest (which recently sold to Google GOOG for $3.2 billion), has been likened to Steve Jobs and Larry Page for his innovative thinking and disruptive technology.

Fortune: Tell me your ‘Aha! moment’ in starting Nest, with its first product being a thermostat.

Fadell: Well, first, I asked, was there a good product idea? And I thought, “Yeah, there’s a good product idea. Okay, there’s none out there. I can research everything on the web. There’s just nothing there.” So then I said, “Okay. Is it a good business? I know I can make this thing. Is it a good business?” And then I asked, “How many are being sold a year? What’s the total available market?”

And when I started doing the research, I was like, “Wait a second. There’s a quarter of a million thermostats in the U.S. alone? Well, if there’s that, what’s the replacement rate?” And I looked and it was over 10 million a year for just residential and light commercial thermostats. I was like, “Wait a second. 10 million? That’s more than game machines! That’s more than washers, dryers, stoves, and ovens. That’s a big market.” We’re dying to find big markets, right? So what else is out there? Bicycles are about the same. Now, people might not perceive it as such. It was just like when we were doing the iPod, people were like, “There’s no money in CD players. It’s commoditized. There’s nothing there. Move on!” The number of units is stagnant, and the price drops every year. That’s the kind of market that’s usually ripe for innovation.

So you had an idea you liked. Then what?

Then I looked at the competition, and I said, “Let’s look who can do what it takes to make this next-generation thermostat.” I went down all the current incumbents, and tried to look for startups that were doing it. And every time I looked, I was like, “Wait a second. If there was true innovation here, I would be seeing it.” It didn’t seem like there was any activity. And then I looked further and I learned that about 70% of thermostats were sold through wholesale. So they weren’t being designed for people to use. They were being designed for installers to install and sell as many as they possibly could. It had nothing to do about the consumer. And then I said, “Wait a second. There’s a market with an old way of thinking in terms of how the consumer learns about the product. The competition is old and hasn’t moved. And third, there’s no innovation whatsoever.”

It reminded me of when we were looking at the smartphone business. Sure, there was lots of competition, but they were being designed for the carriers to sell to the users, not what the users wanted. Then on top of that I said, “Is there a services business here?” So first, is the thermostat a good business? Then, can you supply services to the thermostat? And that’s when we get into the energy services. And I was like, “Okay. This totally reminds me of the MP3 player revolution and the smartphone revolution, where it first started with revolutionary hardware and software on the device. Then it quickly branched out to services and applications.”

At Apple, you weren’t responsible for marketing, but as CEO of Nest you knew that needed to be in your toolkit, right?

Let’s be clear. There’s product marketing, and then there’s marketing and communications. Product marketing, yeah, I was involved in all of that. Marketing and communications is a different thing, which is taking these clear tenets and the differentiation and all these other pieces and then turning them into marketing and messaging and pushing them out through the various print, digital outlets.

I would work very closely with product marketing, but again, product marketing didn’t know what could be created. So what I would try to do is be the linchpin between what the consumer wanted and what engineering could build, and always trying to stitch that together, trying to understand what the marketing differentiation would be, understanding what the ease-of-use would be or the consumer delight would be, as well as what could actually get done and done at a certain price point. Typically product marketing specs something and throws it over the wall to engineering. Engineering says, “I can’t.” And they redact it or take things out of it, put it back to product marketing, and product marketing says, “That’s all we could get.” I tried to take the fine line between the two to push marketing, saying, “No, we can do a little bit more here on the marketing side. Let’s get bold.” And to engineering, I’d say, “Let’s get bold. But let’s not get too bold that we’ve added so much risk to the project that it may never ship.”

On Thursday, Google won accolades for Made with Code, its new $50 million campaign designed to get more young girls interested in science and technology. The company introduced the initiative weeks after revealing that a mere 30% of its employees are female.

Alongside spokeswomen Chelsea Clinton and Mindy Kaling, Made with Code aims to inspire girls to take up the art of code-writing, through software projects, online resources, and collaborations with groups like Girl Scouts of America and Seventeen magazine. Google GOOG will also donate $1 million to fund DonorsChoose.org rewards for girls who complete a coding course on Codecademy and Khan Academy.

One piece of the project comes with physical rewards: Using a programming editor and Shapeways’ 3D printing apps, girls can build a custom bracelet manufactured and shipped for free using Shapeways, the 3D printing startup based in New York.

Shapeways expects the partnership to more than double its current output of 3D printed objects. It has acquired four of the largest 3D printers from printer maker EOS, giving it the capacity to print 8000 bracelets daily. In order to handle all the orders, Shapeways has hired more than 10 new employees. The company has gone from manufacturing during daytime only, to 24-hour operations. “This is a major deal for us,” Shapeways CEO Peter Weijmarshausen says.

A year ago, Shapeways raised $30 million in a round of venture funding led by venture capital firm Andreessen Horowitz, bringing its total funds raised to $48.5 million. That money went, in part, to expanding the company’s 25,000 square foot 3D printing factory in Long Island City. The company allows designers to develop 3D designs for anything from drone parts to model trains to 3D press-on finger nails. Designers can upload their designs to Shapeways’ site and sell those objects through their own Shapeways stores.

If all goes as planned, some of the girls may become interested enough in 3D printing and design to create their own Shapeways shops. “The skeptics in the market would say, ‘How is 3D printing relevant?’” says Weijmarshausen. “This is one awesome example where 3d printing is inspirational.”

“I have a lot of hope that they become the software designers and shop owners of the future,” he adds.

HR services startup Namely raises $4.7 million to take on Paychex and ADP

PaychexPAYX, founded in 1971, and ADP ADP, founded in 1949, have enjoyed quite a run as leaders in the human resources services market. But a new class of cloud-based HR startups is moving quickly to challenge their positions. The most successful competitors are WorkdayWDAY, which went public in 2012 and is now worth more than $15 billion, and SuccessFactors, which sold to SAP SAP for $3.4 billion in 2012.

While Workday and SuccessFactors make a land grab for the large companies, a group of young startups is battling it out to serve the world’s 500 million small and medium-sized companies with fewer than 1000 employees. There’s ZenPayroll, which has raised $26.1 million for cloud-based payroll services, and Zenefits, which has raised $83.6 million for benefits management software.

The latest to raise capital is a New York-based startup called Namely. Today the company announces its latest round of funding, $4.7 million from existing investors True Ventures, Lerer Ventures, Bullpen Capital and VaynerRSE. The company has raised a total of $10 million in venture funding.

Since its genesis in 2012, Namely has accumulated more than 100 customers with 15,000 employees. It has doubled its revenue every four to five months, and has expanded to 40 employees, according to CEO and founder Matt Straz.

Forty percent of those customers are agencies, which makes sense as that’s Straz’s background. Prior to founding Namely, he was a senior partner at MEC, one of the largest media buying agencies. He also co-founded Pictela, a content platform, which sold to AOL AOL.

Namely’s sweet spot is fast-growing organizations with 50 to 1000 employees, which differentiates it from TriNet, which targets smaller companies. The company differentiates from Zenefits and ZenPayroll with its end-to-end offering, Straz says. Namely’s competitors offer one or a few pieces of the HR puzzle, but not the entire stack. Namely offers performance management, employee management, and payroll, benefits, workflow management, approvals and profiles. The software’s time-tracking tools are particularly useful for agencies, which use freelancers and contractors. Namely has rolled out payroll and benefits administration for customers.

The competitive market helps new startups like Namely flourish, because it has companies revisiting their HR software providers and considering cloud-based offerings. “The success of Workday has made it possible for companies like Namely to provide a cloud based solution,” he says. It’s not a winner-take-all market. “It’s going to take a lot of innovation to bring (all of HR services) into the cloud,” he says. “There will be a lot of people that do it with us.”

And of course, the old-school players, Paychex and ADP won’t give up their market position that easily. ADP has been processing paychecks in the cloud for years. And yesterday, Paychex announced it acquired a cloud-based company called Nettime Solutions.

CloudFlare thwarts hackers on the cheap

One of the hottest startups in Silicon Valley almost didn’t become a company. In 2004, Matthew Prince, a lawyer out of the University of Chicago who ditched law for an entrepreneurial life, and a friend, Lee Holloway, launched a free network for tracking spam. An open-source system, Project Honey Pot was a huge success — and still exists. But not until several years later, when Prince was pursuing a Harvard MBA, did he think to develop the idea into a company that could shield websites from rising security threats.

So in 2009, Prince, Holloway, and HBS student Michelle Zatlyn started CloudFlare. Traditionally when a user types in a web address, his web browser sends a request to access the site’s servers. CloudFlare acts as a virtual middleman, fielding requests and neutralizing threats. The startup also stores some of its customers’ content on servers across the U.S., Europe, and Australia, an approach that enables pages to load superfast because the content is located closer to the web surfer. It’s an approach not unlike that of older rival Akamai Technologies AKAM, but CloudFlare uses a freemium model: A free basic plan promises sites speed tweaks and protection. Paid options serve up faster performance and deeper security features. As Prince likes to point out, his little startup now signs up as many as 5,000 new users a day, roughly the size of Akamai’s entire client base.

The freemium model lets San Francisco-based CloudFlare reach small businesses and individual webmasters, like the teenager whose site was targeted by hackers who tried to take it down by flooding it with useless data requests. (CloudFlare declined to name the teen for privacy reasons.) The distributed attack pushed 400 gigabits of data per second at the site. Most sites would have buckled, but the CloudFlare customer’s was unscathed. “We use thousands of signals across our network [such as whether a visitor is a regular],” says Prince, “to decide whether someone is ‘good’ or ‘bad.’ ”

Hobbyists aren’t the only ones using CloudFlare. Customers include eHarmony, Gilt Groupe, and the Franklin Mint.

CloudFlare’s success has made it one of the hottest investments in the startup world. In December 2012 it raised $50 million from backers like Union Square Ventures, New Enterprise Associates, and Venrock. Its valuation of $1 billion puts it in the same league as private companies like Evernote.

Despite such heady numbers, Prince says the company is focused on thwarting hackers, a job that not only keeps CloudFlare very busy but also makes its product better: With each attack, the startup’s digital security network gets smarter as it gains information from customers’ sites. Outfoxing the attack earlier this year didn’t just keep a teen’s website up; data from that failed assault let CloudFlare foil similar attacks on large financial institutions.

Nas is mentoring college grads who have ‘grit,’ thanks to startup Koru

FORTUNE — Josh Jarrett has spent a lot of time thinking about grit. It’s the entire premise of his startup, Koru. Alongside CEO and co-founder Kristen Hamilton, Koru seeks out recent college graduates who possess grit, or tenacity, or resilience, but lack real-world experience, and help them land jobs at fast-growing companies. Koru does that by through intensive four-week training programs, hosted at by the companies looking to recruit raw talent.

Through a filtering system, the company identifies job hunters who possess those qualities – the ability to take ownership, take initiative, and thrive in a fast-paced environment – and connects them with companies which are hiring. “High growth companies are looking at people who are street smart a well as book smart,” says Jarrett.

It made perfect sense, then, that this idea of grit and tenacity would appeal to the rapper Nas. “His background is the school of hard knocks in a certain way, and learning through experiences in life has gotten to him where he is,” Hamilton says. “He’s compelled by the way we’re preparing people to go to work.”

When Nas heard about Koru during the company’s $4.2 million Series A last December, he was excited enough to reach out and get involved. Now he’s putting his own money into the company, via his investment vehicle, Queensbridge Venture Partners. Beyond that, he’s decided to lend his time and star power, too.

Starting with the next class of trainees, Nas will offer ten scholarships to students (they cost $2750) to take Koru’s four-week program. He’ll also appear at a training session and offer advice and mentorship.

Koru is currently available in Seattle, but it will launch a program in San Francisco in September. The startup has worked with companies such as REI and Zulilly ZU, placing 63% of several hundred graduates into jobs. Koru makes money from its tuition, as well as through placement commissions from partner companies.

Recruiting is a pain point for many high-growth companies, and a number of startups have sprung up to serve them. Companies struggle in particular with entry level workers who have no experience to highlight in their applications. “Hiring mistakes are expensive,” Hamilton says. “We realized a degree and GPA is not a good signal. We’re looking to be that signal.”

At the training programs, students do real project work within the companies. The idea is to help them develop hard skills around business, and personal skills around working with others. It may seem bizarre to outsiders that young people would pay a company to let them temporarily work for them, but Hamilton says skeptics come around once they see that Koru’s training is more valuable than an internship. “People quickly recognize they’ve been in school for four years and haven’t had a chance to even be in the arena where they’ll be working and expected to perform well,” she says. “People are starving for a way to get on the inside of a company.”

Nas isn’t the first celebrity to get involved with startups. Justin Beiber, Ashton Kutcher, Adrian Grenier, Oprah, Madonna, Ellen Degeneres, Z, Shakira, Will Smith, reality star Rob Durdek, and soccer star Gerard Pique have all invested startups, to varying degrees of success. Celebrity interest is an obvious indicator that there might be a startup bubble.

Not all of the investors mentioned above lend much beyond their name to the startups they back. But some want to get their hands dirty. That includes Nas, who has offered product feedback and promotional help where it makes sense, such as with Rap Genius, Crowdtilt, and now, Koru. Alongside his manager, Anthony Saleh, Nas has backed more than 40 startups, including Rap Genius, Crowdtilt, Coinbase, and Prism Skylabs. Most of the deals Nas participates in come to him through Andreessen Horowitz, who he met through Rap Genius.

Foursquare has always been misunderstood. Will Swarm clear things up?

FORTUNE — While Foursquare has received its fair share of media hype over the years, the company has spent most of its existence defending itself. When the social-mobile-local app first launched in 2009, people scorned at the concept of “checking in” — why would you want to blast your location out to the world? Later they dismissed its game-like aspects, which included badges, a leader board, and arbitrary points. They scoffed when, at the peak of its popularity, the company raised $50 million at a $600 million valuation. (In total, the company has raised $142 million in VC funding and $20 million in debt.)

Dennis Crowley, the company’s charismatic CEO, has been in a constant state of explaining Foursquare’s value and raison d’être. The company has launched endless iterations and redesigns, like “Explore,” which de-emphasizes the social network aspect of the app in lieu of a personalized search engine, and a feature which sends you automatic push notifications about deals and restaurants nearby.

No matter, the high-profile company remains subject of intense debate among techies, and of derision among people who don’t get it. It’s easy to dismiss.

Today, Crowley and crew revealed something much more radical than iterations past: Foursquare has “unbundled” its app, building an entirely separate app called Swarm, which will handle the social network part (checking in without actually using the term “check-in”). The existing Foursquare app will handle search and recommendations. Swarm will appear in Apple’s App Store within the next two weeks.

Unbundling is becoming popular with consumer web companies. Facebook FB has led the charge, launching a separate mobile messaging app called Messenger, which now has 200 million users, and a content recommendation app called Paper.

The idea is that apps should be simple and focused in their utility, rather than try to be everything to everyone. The decision to unbundle was based on the way people use Foursquare. There are two distinct use cases — sharing your whereabouts, and recommendations — and they don’t necessarily overlap. “People hire an app to do a specific thing,” says Jon Steinback, Foursquare’s VP of product experience.

But for Foursquare, a company which has been misunderstood for so long, the addition of another app could further confuse people. The two apps will operate separately, though they will prompt users to move back and forth between the two, says Steinback. “If you tap on a link in your email app, it might take you to Chrome. We think of it in the same way,” he says. Swarm will know historic check-in data from Foursquare, but the apps won’t share real-time location data with each other.

Foursquare will encourage its existing users to download Swarm. (There are 50 million Foursquare registered accounts.) They will no longer be able to check in on Foursquare, though their check-in history will guide the app’s personalized search results. Existing and new users might need some hand-holding to figure out how it all fits together. Or maybe they won’t care, the same way Facebook users say they distrust the company, but continue to engage with it at record levels.

There are plans to monetize both Swarm and the regular Foursquare app. Swarm will show users special offers when they check in at a location or in a neighborhood. Foursquare will continue to show sponsored search results and recommendations, as it has for the last few years. According to The Verge, Foursquare booked $12 million in revenue last year and is on track to bring in $40 million to $50 million this year.

Foursquare has been fighting public perception that it’s a failure ever since the company raised that difficult debt round in 2012. Regardless of whether that perception is fair, with Swarm, Foursquare has shown it is willing to make radical changes. Steinback says Swarm isn’t just a little experiment — Foursquare is all-in on this. “We set out with this strategy and we feel confident about it,” he says. “This is the future of the company.”

This post has been updated to reflect the company’s correct amounts of equity and debt raised. Foursquare raised $41 million in debt, but $21 million of it has since been converted into equity.

Disney tried to buy BuzzFeed

The Walt Disney Co. was in talks to acquire online content juggernaut BuzzFeed earlier this year, Fortune has learned. Talks apparently broke down over price — with BuzzFeed said to have sought upwards of $1 billion — and are not believed to still be active.

BuzzFeed last raised venture capital funding in January 2013, when it secured $19.3 million at around a $200 million valuation. But, even then, investors were touting the New York-based company’s ability to become a billion-dollar property.

Discussions with Disney DIS wound down as Disney’s pursuit of multichannel video network Maker Studios heated up. The Maker Studios transaction will be for $500 million, plus possible earn-outs that could bring the deal closer to $1 billion. A source familiar with Disney’s strategy says that the company saw Maker as “a call option on over-the-top content” from multichannel networks — something that it did not want to build itself.

But Disney wasn’t as interested in dropping 10 figures for BuzzFeed, largely because the strategic fit isn’t as tight. Disney focuses on acquiring and aggregating intellectual property, which it can monetize through many channels like licensing, merchandising, TV, games, animation, and theme parks. BuzzFeed’s content ranges from entertainment-style lists to serious reporting, having recently hired Pulitzer-prize winning journalists Mark Schoofs and Chris Hambly.

At the same time, BuzzFeed wasn’t exactly begging to be bought. The company continues to grow quickly and value its independence. In a letter to employees last fall, CEO Jonah Peretti wrote that the company had hit profitability with more than 300 employees and 85 million monthly unique visitors. Moreover, Bloomberg reported that BuzzFeed is forecasting $120 million in revenue in 2014, which would double its 2013 sales.

BuzzFeed has raised a total of $46.3 million in funding from Hearst Ventures, Softbank Capital, Lerer Ventures, RRE Ventures, SV Angel, Founder Collective, New Enterprise Associates, and angel investors. It is known as a leader in the new category of “native advertising,” which sells sponsored content created by an editorial team to brands.

Messages left with Disney were not returned. A BuzzFeed spokesperson declined to comment on the story except to say that BuzzFeed is not in talks with any companies and “is focused on becoming a big, independent company.”